Paraguayan Economy Fueled by Several Key Industries, Including Renewable Energy
Paraguay has seen a resurgence in its economy with political stability and market potential in several key sectors. In 2010, Paraguay achieved economic growth of 15.3 percent, the highest in Latin America for that year. Today the country has a market economy particularly characterized by, on the one hand, growing agriculture and cattle farming sectors, and on the other, a large re-export activity of imported consumer goods to neighboring countries. Moreover, a majority of the country’s economic activity is carried out by thousands of small and very small enterprises involving just one or a few people.
The government has been playing a vital role in spearheading the nation’s new success, implementing institutional, regulatory and fiscal changes over the last eight years. Monetary and fiscal stimulus measures have been employed swiftly, particularly during the time of the financial crisis in 2009/2010, which placed the country back on an expansion mode.
What makes Paraguay so attractive? Several things:
- Paraguay has an abundance of good quality agricultural land, with extensive renewable energy (Paraguay is the world’s largest exporter of renewable energy) as much of the potential arable land is still not used.
- It also has a growing organic agriculture sector (Paraguay is the world’s largest exporter of organic sugar), and a thriving cattle industry (Paraguay has the potential to become a top-eighth world exporter of meat).
- Additionally, Paraguay boasts a youthful and forward-moving population, a prime geographical location, lack of restrictions on the movement of capital, and, last but not least, one of the world’s largest reserves of fresh water.
“Paraguay uses only about 15 to 20 percent of the energy it produces,” says German Rojas, a former president of the country’s central bank. “The remainder is sold abroad (lighting up southern Brazil as far as Rio de Janeiro). Paraguay has enormous potential for growth as half of the country is good land for agriculture. 4.5 million hectares are currently used by mechanized agriculture for cereals and you could increase that number by up to 86% more.”